Latham & Watkins Discusses Supreme Court Hearing on State Jurisdiction Over Securities Claims

On November 28, 2017, the Supreme Court of the United States held oral argument in the highly anticipated case of Cyan, Inc. v. Beaver County Employees Retirement Fund, No. 15-1439, to decide whether the Securities Litigation Uniform Standards Act of 1998 (SLUSA) divested state courts of subject matter jurisdiction in lawsuits solely alleging claims under the Securities Act of 1933 (the Securities Act). Because of the procedural roadblocks to challenging remand motions in federal court, the Supreme Court took review from an appeal from the California Supreme Court. Defendants/Petitioners argued that state courts did not have jurisdiction over “covered … Read more

Latham Discusses How Second Circuit Broadened Personal Benefit Test for Insider Trading

On August 23, 2017, the Second Circuit issued its second significant decision on insider trading liability in the past three years, United States v. Martoma. In its 2014 decision in United States v. Newman, the Second Circuit limited the circumstances in which the government could prove insider trading on evidence that someone privy to inside information (a tipper) passed that information to another person (a tippee) who then traded on the information. Last year, the US Supreme Court’s decision in United States v. Salman called into doubt some of the limits imposed in Newman, but the scope … Read more

Paul Hastings discusses Ninth Circuit’s Decision on Loss Causation

On August 7, 2014, the Ninth Circuit issued its decision in Loos v. Immersion Corporation, addressing for the first time whether a company’s announcement of an internal investigation into fraud is, alone, sufficient to establish “loss causation” for claims under the federal securities laws.[1] The Court held that the mere announcement of an investigation was not sufficient to plead loss causation.[2] The decision in Loos solidifies defendants’ position that the disclosure of a “risk” or “potential” for fraud cannot stand as the revelation of fraud to support loss causation arguments at the pleadings stage.

Dura Pharmaceuticals: Defining the Read more